Despite many local and global challenges, the Thailand startup ecosystem continues to stabilise and grow. New startups are sprouting and attempting to provide innovative technological solutions to a country with millions of tech-savvy young people, while more established companies are looking to improve on last year’s results.
COVID-19 cases are rising again in Thailand, and unfortunately, deaths, just as the Association of Southeast Asian Nations (ASEAN) began to open up again to the world. Regardless, the country is working to boost its startups by providing funding, guidance from more experienced leaders, and creating a welcoming work environment.
Thailand leads the world in adoption of next-gen financial services
Here are some of the developments:
Funding trends in Thailand
According to the Global Startup Ecosystem Report (GSER) 2021, startups in ASEAN are attracting funding from global, regional, and local investors. Several Thailand startups and investment fund groups have raised money recently:
Ricult
Ricult, a digital agri-financial solutions company, democratises lending for farmers to ease their financial burden. It provides weather forecasts, productivity advice, and farm analytics to improve yield. It also uses analytics to provide farmers with access to financial service solutions.
Last year, Ricult secured $3.5 million USD for its Pre-A funding round from Japan’s Sojitz Corporation to support its growth and expansion plans. The Bill and Melinda Gates Foundation, Bualuang Ventures, Wavemaker Partners, MIT Delta V, and Krungsri Finnovate are among Its other investors.
Bualuang Ventures
The investment firm, Bualuang Ventures, is the venture capital arm of Bangkok Bank Public Company Limited, and provides growth capital and support to small and medium-sized enterprises (SMEs) in Thailand. The chosen SMEs have the potential to impact their industry, disrupt the regional sectors, and achieve sustainable growth.
Bualuang Ventures plans to raise about $60 million USD from its parent company to fund its five-year investment plan.
SeaX Ventures
Southeast Asia Exponential Ventures (SeaX Ventures) is a venture capital (VC) company that identifies the best investment opportunities and funds early-stage companies with transformational technologies.
SeaX Ventures launched a $60 million USD fund to help accelerate the growth of global startups throughout Southeast Asia. It is investing in companies in blockchain, web3, robotics, foodtech, artificial intelligence, and other innovative technologies.
Changes to the financial system
In March, Thailand’s Securities and Exchange Commission (SEC) and central bank took steps to safeguard the country’s financial system. The SEC banned Cryptocurrency as a payment method, while the central bank encouraged banks to invest just 3% of their assets in digital assets to 3%. These measures are intended to keep business costs down, shield the country from a potential liquidity crisis, and strengthen the Thai Baht.
Cryptocurrency trading and exchanges are still available. According to Statista research, 38.8% of respondents invested in Cryptocurrency exchanges, whereas 27.8% used traditional online brokerage platforms. In order to boost Thailand’s crypto economy, the Thai government agreed to ease tax restrictions for digital asset investment.
What does it all mean for the Thailand startup ecosystem?
Thailand is grappling with skilled labour shortages, nascent COVID-19 strains, rising energy costs due to the Russia-Ukraine War, and a complicated regulatory framework that burdens its startups and VC firms. The COVID-19 pandemic, for example, has impacted the easing of border restrictions that were vital to reviving the tourist and travel industries.
Low skilled labour is stifling innovation and tech management, and the Thai government should consider enacting new guidelines to enable foreign talent to fill those jobs. Thai citizens should also receive training to be able to upskill themselves in order to work in tech-related positions.
The Thai government must make it easy to start a new business and operate without fear. Stakeholders should evaluate the regulatory framework in order to improve the country’s rankings in the Ease of Doing Business metrics. In addition, they should strengthen regional relationships and clarify the procedures for Initial Public Offering (IPO) to make it easier for companies to expand or be acquired.
Financial technology (fintech) is growing as an integral element of the digital revolution, with digital payments expected to reach $31.25 billion USD in 2022. Despite the fact that no new cryptocurrency companies were founded last year, blockchain-related industries are popular among the tech-savvy youth, generating investment prospects.
Because the majority of attention is usually focused on Singapore, more should be done to position Thailand as a viable startup destination for the region. As companies like Microsoft partner with local agencies to guide startups, the knowledge-sharing culture will benefit Thailand and ASEAN.
With the proper funding and support from the government and investors, the Thailand startup ecosystem may thrive. While there are many challenges to overcome, the country’s continuing progress, technological innovation, and infrastructure improvements provide a solid foundation for success. Thailand startups need support, access to digital solutions, and governmental incentives that can spur further growth.